The health care reform plans taking shape in Washington are bound to fail. What the Democrats seem to have in mind will do nothing effective to deal with rising costs.</p><p>If reform fails to curb costs, a budgetary disaster will result. Massachusetts has already implemented the sort of micro-managing, government-dominated reform the Democrats advocate. Costs exploded.</p><p>Health reformers must accept that successful reform can&rsquo;t take place outside the basic laws of economics. To discipline producers &mdash; and control costs &mdash; you need a functioning price system and consumers with the freedom and means to make choices. You need a real market.</p><p>The first step toward that goal would be decoupling health insurance from employment: We should tax employer-provided health benefits and then give people a deduction or a tax credit covering the average premium. Plans with benefits above that amount would be taxed like income.</p><p>This idea has solid bipartisan support. Economist Jason Furman, now a White House aide, discussed it in 2006. President Bush proposed a version in his 2007 State of the Union Address. John McCain offered his own version in his presidential campaign.</p><p>Leonard Burman of the left-of-center Tax Policy Center recently pointed out that this approach would immediately force employers to reveal what they pay for health insurance.</p><p> Many workers would rather have higher pay than a gold-plated policy. As Burman noted in a Washington Post article last week, &ldquo;If machinists earning $50,000 a year knew that their employers were paying $20,000 for their health insurance, many would ask them to find a cheaper plan (such as an HMO) and boost wages.&rdquo;</p><p>And that would only be the beginning. Giving individuals the same access to tax-free insurance that employers enjoy would put policies within reach of many more consumers. </p><p> A few other changes would also help. Congress should make health-savings accounts, now available only to people with high-deductible policies, widely available. Medical-malpractice laws must be reformed to reduce the number of unnecessary medical tests. And Congress should create a national insurance market.</p><p>Thanks in part to state mandates, a standard policy for a healthy 25-year-old man in New Jersey costs $5,580, according to the National Center for Policy Analysis. In Kentucky, a standard policy costs only $960 a year.</p><p>Why not let the New Jersey man buy the Kentucky policy if he feels that suits his needs? That would help send a message to New Jersey&rsquo;s insurers, not to mention that state&rsquo;s mandate-happy lawmakers.</p><p>With more people carrying health savings accounts and paying more of their incidental costs &mdash; and the emergence of a national market &mdash; you&rsquo;d have more people interested in the prices for various medical services. </p><p>Providers who offered shoddy work at exorbitant costs would be penalized by the market. Web sites would spring up to rate clinics and specialists and offer consumer reviews, as they have for airlines, hotels and other service industries.</p><p>Real markets already exist in cosmetic surgery; buyers seek good prices and providers compete for business. Thanks to competition and ready access to information, real prices in cosmetic surgery have fallen over time.</p><p> Many assume this is impossible for health care in general, but that&rsquo;s only because for too long, insurance has been linked to employment and most of us are insulated from the real costs. </p><p> Health-care professionals see themselves as working less for consumers and more for insurance companies. Call up a doctor&rsquo;s office some time and ask what a procedure costs. Chances are, they&rsquo;ll behave as if you&rsquo;re weird. </p><p>A safety net must be maintained for people with disabilities and chronic illnesses, and some revenue from taxing gold-plated health insurance should be allocated to bolster state risk pools. That will make insurance more affordable for qualifying individuals.</p><p>But real health care reform is about restoring consumer sovereignty. Any &ldquo;reform&rdquo; that fails to put more power to choose in the hands of consumers will fail to constrain costs. If Washington chooses a mandate-heavy plan a la Massachusetts, we will have wrecked the world&rsquo;s most innovative health system &mdash; and implanted an incurable financial cancer in the federal budget.